· At £16.99, Harry Potter and the Order of the Phoenix will be the priciest children's novel ever published. The million-plus fans who will buy it between publication on June 21 and the end of the year would be quite happy to pay that sum. But they will not have to. JK Rowling's novel will be widely discounted, by as much as 50% in some places. Bloomsbury, her publisher, is in a very strong negotiating position, and does not need to subsidise these price cuts.

The author, one can assume, receives fair royalties. It is the retailers who are prepared to give away the money. In 2001, Harry Potter and the Goblet of Fire, with a recommended retail price of £14.99, sold more than one million copies at an average selling price of £11.36. Booksellers faced the most voracious demand for a hardback in recent publishing history, and nevertheless gave away more than £3.6m to encourage people to buy it.

· Three bookselling chains announced this week that they had outperformed a market that saw Christmas book sales roughly level with those in 2001. Waterstone's reported a 5.6% increase in like-for-like sales - that is, adjusting for a few store closures. The chain will be hoping that this result reflects the value of a period of reorganisation for which it took a hit in its last set of results: its total sales in the half-year to October 26 were 3.1% down, although its operating profits improved.

Ottakar's, which has more branches than it did this time last year, is 5% up, over a slightly different period. Blackwell's, which unlike the other two is a private company, reported growth of 6.9%; its best-known shop, in Broad Street, Oxford, was 13% up. These chains account for nearly half of book retailing in Britain. In the other half of the market, there appear to be booksellers who have gone through a hard time.

· The most prolific prizegiving ceremony in the literary calendar is to gain a further award this year. The Elizabeth Longford prize for historical biography, in memory of the late author, joins the nine or so (it varies from year to year) awards that are given at the Society of Authors' awards evening in June. It will be judged by Antonia Fraser, Flora Fraser, Michael Holroyd, Ben Pimlott and Andrew Roberts, whose authority in the field is reflected in the society's announcement that "submissions will not be required". The winner will receive £3,000, from a total prize fund of more than £80,000 that will be shared among about 25 authors on the evening. It is just as well that the society does not allow them to make speeches.

· As reported here before, the UK book industry is worried that a forthcoming European review of VAT rates might involve a reassessment of the zero rating that at present applies to books. Some books, though, already attract VAT: audiobooks are taxed at 17.5%. Publishers and booksellers fear that printed books will join a list of goods to be taxed at a new minimum rate of 5%; the audiobook industry wants its products to join that list. The Spoken Word Publishers Association estimates that the reduction to 5% VAT would reduce the price of a £9.99 audiobook by £1.

· The controversial scheme to employ prisoners to drill holes in unwanted books is on hold. A summit meeting this week to discuss the handling of the books that retailers send back unsold to publishers decided that other aspects of the issue deserved more immediate action. Millions of books are pulped each year; the scheme would have involved prisoners in the destruction, and centralised the process.

· It is three years since the government last earmarked money for schools to spend on books. But it is extremely keen for them to use online resources. Last week, it opened the Curriculum Online elearning portal, and announced £280m funding for schools in England to spend on elearning materials; and it is giving £92m to College Online, for 16-year-olds and above. There is also to be a substantial amount of material available free online, following the controversial decision to allow the BBC to develop its digital curriculum for primary and secondary schools.

Many commercial publishers are furious at having to compete with free material from a publicly funded competitor, and only partly mollified by the Curriculum Online funding, and by the BBC's promise to get content from the commercial sector. Meanwhile, teachers, parents and pupils may well be bemused by the relationship between these bold announcements and what is at present happening in classrooms.